In 2008, 21 million people required long-term care (LTC) services. About 70 percent of people over age 65 require some type of long-term care services during their lifetime. Since there is a good chance that you might need long-term care services at some point, it is important to explore your options and plan ahead. People often put off planning for long-term care because they do not want to think about a time when they might need it. Most people first learn about long-term care when they or a loved one needs care. However, if you wait until you need services to start planning, your options may be limited. You may not be able to find the information you need to make decisions. You may not have the money you need to pay for the services you want. Or you may have to rely on your family or others to make decisions for you.
The Importance of Planning for Long-term Care
Planning for long-term care is important because there is a good chance you will need some long-term care services if you live beyond the age of 65. About 70 percent of people over age 65 require some services. The older you get, the greater the chance that you will need long-term care.
Planning is also important because long-term care can be very expensive, and Medicare and other health insurance programs don’t cover many long-term care services. The cost of long-term care services is often more than what the average person can pay from personal income and savings. Planning ahead gives you the time to save for your long-term care needs or to find the payment options that work best for you if you need services.
Planning helps you understand:
- Services available from your family and in your community
- Special conditions (such as age or income) that may apply for receiving services
- Costs of services
- Public or private payment options available to you
This information helps you understand your options, and makes it more likely that you will be able to get and pay for the services you need and prefer.
Examples of People Who Planned for Long-term Care
What exactly do we mean when we say planning? Below are some examples of how people might plan for long-term care before they need it. While these are fictional examples, they represent a variety of real-life situations and the different forms that long-term care planning might take. There is no one-size-fits-all plan.
As you read these examples, think about your own circumstances and the options you might want to consider.
Example 1: Mrs. F is 81. She has osteoporosis, arthritis, and high blood pressure. Otherwise she is basically healthy, but frail. She lives on a limited, fixed income and does not have significant assets to draw upon to help her meet her long-term care needs. She has been living in a modest one-bedroom rental unit, but is finding it difficult to maintain her apartment on her own.
Mrs. F plans to:
- Talk with her daughter about moving in with her.
- Pay for modifications to her daughter's home that include expanding a half bath to a full bath.
- Look at the types and costs of services available in the area.
- Develop legal documents such as an Advance Directive that allows someone she chooses to make decisions for her if she is unable to speak for herself, or a durable power of attorney that gives someone she chooses the ability to manage her affairs.
Example 2: Mr. C is an 82-year-old widower. He lives in the modest home in which he raised his children. He has prostate cancer and has had a pacemaker for the past two years. He is still able to take care of all his physical needs and wants to remain in his home, even if he needs services. But his income and assets may not be enough to pay for services if he needs them for a long time.
Mr. C plans to:
- Use his home to get cash through a reverse mortgage that, added to his savings, will pay for services if needed later.
- Discuss with his son and daughter what this option will mean to them. They can keep the house by repaying the reverse mortgage loan amount when it is due (upon Mr. C’s death or when and if he needs to permanently leave his home). They can also sell the house and use the proceeds to pay off the loan amount, and keep any funds left over.
Example 3: Ms. S is a 46 year old woman who recently had to help her parents with long-term care services. This experience made her realize how expensive long-term care services can be, and that she might not be able to pay for her own long-term care services out of her retirement income and savings. Ms. S has family, but doesn’t want to rely on them. So she decided to look into ways to pay for services if she needs them. Ms. S found out that as a federal employee, she can purchase long-term care insurance at a reduced rate. She decided to buy a plan now to take advantage of lower premiums. The plan she chose will allow her to be cared for at home, in an assisted living facility, or in a nursing home if necessary.
Ms. S plans:
- Purchase long-term care insurance and pay her premiums through an automatic deduction from her bi-weekly paycheck.
- Prepare a living will so her family will know her preferences and wishes for care and life support if she becomes unable to communicate or carry out her preferences on her own.
- Speak with her daughter and niece and specify her preferences for care.
It’s difficult to predict if or how much care you will need, the costs involved, and whether you will have family or friends who can provide some or all of your care. There are many factors to take into account, including your age, health status, and whether or not you’re living with a disability. You may want to think about your long-term care needs as you conduct retirement planning. Consider the following topics in planning for your possible long-term care needs.
The older you are, the more likely it is that you will need long-term care. You might also consider your family history. Did your parents or grandparents have a disability? Also consider that:
- between ages 40 and 50, on average, eight percent of people have a disability that could require long-term care services;
- while 69 percent of people age 90 or more have a disability.
Although being older means you are more likely to need long-term care, having an accident that causes a disability when you are younger cannot be predicted. Some private financing options, for example long-term care insurance, cost much less when you are younger and reverse mortgages are only available at or after age 62.
Women outlive men by about five years on average, so are more likely to live at home alone and without assistance when they are older. Women who take time out of the workforce to have and raise children or care for other family members end up with lower pension and social security benefits than retired men. As a result, women in particular should actively plan for their future long-term care needs.
If you exercise regularly and eat healthy foods, you are less likely to develop many types of chronic conditions and are more likely to avoid developing a disability.
4) Health status
If you have chronic conditions, such as diabetes and high blood pressure, you are more likely to develop a disability. You might also consider your family history. Did your parents or grandparents have chronic conditions?
Bear in mind that some methods of paying for long-term care services require that you undergo health screening. While some options require that you be in relatively good health, other options are only available to you if you are in poor health.
5) Financial resources
Long-term care can be costly. If you have more than $100,000 in savings that is not used as a source of income, you may be able to pay for long-term care on your own—generally at least:
- a little longer than a year in a nursing home;
- 2.5 years in an assisted living facility;
- and several years of home care.
If you have less savings, but are not poor, consider the various private financing options.
If you have low income and little savings, review this website’s section on Medicaid to see whether you might be covered.
In making decisions about long-term care, think about where you want to live and whether your home will continue to meet your needs. For example, are your bedroom and bathroom on the first floor? Are your doors wide enough for a wheelchair?
Personal Planning Steps
How can you know your risk of needing long-term care?
While you can never know for sure if you will need long-term care, you can find out whether you are at a higher or lower risk. One factor that may indicate whether you will need long-term care is the experience of your parents and grandparents. How old are they, or how long did they live? Did they have heart disease or another chronic illness? Living longer and having a chronic illness can increase your risk. Your daily choices, such as how much you exercise, can help lower your risk.
How can you maintain your health and independence as long as possible?
Many people don’t make the connection between healthy behaviors and their impact on later life, but research shows that chronic disease and disability are not always inevitable. Studies by the National Institute of Aging show the following to be important to maintaining your health and independence:
- Healthy eating
- Physical activity
- Mental stimulation
- Not smoking
- Active social engagement
- Moderate use of alcohol
- Maintaining a safe environment
- Social support
- Regular health care
Even if you haven’t been active in the past, it’s not too late to start.
Do you have family members who will provide care?
People who turn 65 today may need up to three years of long-term care services, with almost two years of that care provided at home. Family members (spouses, adult children, children, siblings) or other unpaid caregivers provide most of these services. You should talk to your family and friends about their willingness or ability to help you if you became ill or need help doing things like bathing, dressing, or getting to doctors appointments.
Or you might already be a caregiver for someone else. In either case, it is good for you and your family to understand how caregiving activities can affect you and your family, and what resources and supports are available to supplement these services if needed.
In addition, you can review the home and community-based services that can supplement unpaid caregiving, or provide respite for caregivers.
Where do you want to receive services?
If you needed services for an extended period of time, and couldn’t stay at home, where would you want to receive services?
One way to find out what services are in your community is by going to the Eldercare Locator, which the Administration on Aging provides to help you find community resources in your state.
Financial Planning Steps
Do you know what your insurance covers?
If your existing medical coverage is Medicare, Medicare Supplemental Insurance (the insurance you buy to help pay for services Medicare doesn’t cover), or a health plan (an organization you may belong to that manages your health care), you may have little coverage for long-term care. Medicare and other health insurance don’t cover the most common types of long-term care services such as personal care. Review the policies you have with your insurance advisor or benefits counselor to learn what is covered and what is not.
Can you, or do you want to, pay for long-term care on your own?
If you don’t have insurance coverage for long-term care, or if you prefer to pay for it out of your own resources, do you know if you would be able to cover all the costs for services you might need? Assess your income and financial resources, and consider how you feel about using them to pay for long-term care. Your financial resources could include any of the following sources:
- Social Security
- Savings and the interest income from any savings you have
- Stocks and bonds
- Dividends from stock you may own
- Payments from a retirement savings account like an IRA or 401(k)
- Your home
What does your current or future insurance cover?
It is important to know what your future or current insurance policy covers. If you only have Medicare, even with a Medicare supplemental plan, most of your long-term care services may not be covered. If you have limited resources, now or in the future, Medicaid may pay for your services. You can find more information on Medicare, Medicaid, and other public programs in the Paying for Long-Term Care section of this website. You can also go to the Centers for Medicare and Medicaid Services website for more information on Medicare and Medicaid.
What other resources can help you cover long-term care expenses?
If you are like most people, you won’t be able to pay for all of your long-term care service needs on your own, especially if the services you need are expensive, or you need services for a long time. There are an increasing number of private payment options that can help. Two of the more common options are long-term care insurance and reverse mortgages. It is important to review private financing options carefully so you understand how to qualify, what they cost, and how you receive benefits. You can read about the range of private long-term care payment options in the Paying for Long-Term Care section of this website.
Legal Issues & Planning Steps
What is advance care planning?
Advance care planning involves deciding on a plan for what you want at the end of your life. It also includes arrangements in the event that you cannot make those decisions for yourself when the time comes. It entails discussing your wishes, completing legal documents, and appointing a health care decision maker.
You should consider these questions as you plan:
- What are your values and beliefs? When developing an advance care plan, consider your concerns, values, spiritual beliefs, or your ideas about what makes life worth living.
- What do you want for yourself? Most people think about the way they wish to face death or disability but may be uncomfortable discussing these topics. Sometimes sharing your own ideas, if you are helping someone, or reviewing the situations of other family members or friends who have been in similar situations, can help.
- Who do you want as your decision maker? Decide who should make decisions for you if you cannot. Choose someone who will understand and be able to carry out your wishes even if they include stopping life-sustaining treatment.
What types of planning documents do you need?
“Advance directive” is a general term used to describe these two types of documents:
- Living wills: Living wills (sometimes called “medical directives”) are written instructions for care you want in the event that you are not able to make medical decisions for yourself. State laws vary, so it is important to check on your state’s requirements when completing a living will.
- Medical power of attorney: Medical power of attorney (also called a health care or durable power of attorney) is a document that names a particular person as your health care decision maker, one who will make decisions for you if you are unable to do so yourself (not just during a terminal illness).
These planning documents describe the type of care you want if you cannot speak for yourself, and names the person who you want to make decisions for you. Advance directives should list the treatments you do and don’t want to receive.
For example, you may choose to have your doctor include a Do Not Resuscitate (DNR) order in your medical record. This tells all health care providers that you do not want them to attempt life-saving measures such as cardiopulmonary resuscitation (CPR) in the event you have heart attack or respiratory arrest. You may include a DNR in your planning documents, or tell your health care providers.
How can you ensure that people will follow your plan?
Here are steps you can take to help ensure that people follow your plan:
- Complete a living will and a medical power of attorney. If possible, consult with a lawyer or other professional about specific state laws or regulations.
- Ensure that your family and other important people in your life understand what your wishes are and what is included in these documents. Discuss your decisions with the person who will make your health care decisions, and be sure that they are comfortable with their role, and that they can be available to carry out your wishes.
- Keep your planning documents easily accessible and in more than one place. It is important that your health care decision maker has a copy, or can access a copy quickly in an emergency. Give copies to appropriate family members and friends, your physician, and your lawyer. Consider carrying a wallet card.
- Review your plans periodically to be sure that you are still satisfied with your decisions, and your health decision maker is still able and willing to carry out your wishes.